Transwestern Increases M-F Focus: Teams with Amstar to Build Apartments in San Antonio

A plan to build a 229-unit, Class A apartment building in San Antonio with Amstar, is part of Transwestern Development Co.’s increased focus on multi-family projects.

A plan to build a 229-unit, Class A apartment building in San Antonio with Amstar, a Denver-based real estate investment firm, is part of Transwestern Development Co.’s increased focus on multi-family projects.

Transwestern and Amstar, acting on behalf of one of its public retirement system clients, announced the acquisition of a 2.3-acre development site in San Antonio’s Southtown submarket for an in-fill, luxury apartment building that will be known as Southtown Flats. Located at 111 Probandt St., the development will be close to many of San Antonio’s most popular restaurants, bars and shopping destinations.

Construction is expected to start in January with the first units ready for occupancy by the first quarter of 2016.

Southtown Flats will have two five-story buildings that surround a 4.5-level garage. The units will have upgraded appliances and finishes. The community amenties will include a pool with outdoor kitchens and cabanas; roof deck with grilling areas and fire pits; clubhouse and fitness center.

“Southtown Flats will be constructed to the highest quality finishes that San Antonio renters are seeking. The Southtown neighborhood is in high demand because of its rich culture, new restaurants, art galleries and proximity to downtown,” Josh Delk, Transwestern Development Co. associate vice president, said in a release.

“San Antonio is still early in its economic recovery and with strong renter demographics, we believe Southtown Flats will be a successful investment,” added Amstar Managing Director Daniel Cohen.

Amstar and Transwestern Development, a Houston-based firm that creates commercial real estate projects for itself, partners and clients throughout the United States, previously teamed up on a mixed-use, multi-family property on South Lamar Boulevard in Austin, known as The 704. It has about 380 apartments and 20,000 square feet of retail and restaurant space.

In October, Transwestern announced it had acquired about five acres to build The Grove at Waterside, a 385-unit luxury multi-family development in Fort Worth, Texas, scheduled to break ground early in 2015. Transwestern Development’s partner on that project, which is being built in Waterside, a 63-acre, mixed-used, master-planned community, is Crow Family Holdings.

Carleton Riser, Transwestern Development’s president, told Commercial Property Executive Austin and Fort Worth, along with Houston, San Antonio and Tempe, Ariz., are among eight target residential markets and committed projects the firm has now.

“Transwestern Development Co. is actively looking or has projects under contract in several other markets,” he said.

Riser said the firm is looking outside Texas, including all regions from the Mid-Atlantic to Arizona, where it already has a project committed for Tempe.

He explained why Transwestern is focusing on Texas and several other markets for more multi-family development.

“The Texas markets are where the strongest job and employment growth has been occurring, and all eight of Transwestern Development Co.’s target markets display historical characteristics of higher job growth and higher net in-migration than the national average,” he told CPE.

In the fourth-quarter edition of Transwestern’s Insights + Trends + Opportunities report, Mark Culwell, managing director of multi-family development, noted that forecasts of potential overbuilding in the multi-family sector were premature.

“Multi-family development in the U.S. has yet to meet pent-up demand, and annualized effective rent growth was 4.1 percent in August 2014, the highest since October 2011,” Culwell wrote. “At the current rate of development, we anticipate production capacity and demand will reach equilibrium by mid-2015. Subsequently, the industry could enjoy up to six additional years of sustainable production, if developers and lenders carefully monitor demand and modify deliveries accordingly.”